Do community colleges deserve better funding?

By Lynn O'Shaughnessy

Updated on: June 4, 2015 / 6:01 AM
/ MoneyWatch

Americans have heard a lot of political talk in recent months about making community college free for students. But what has attracted far less attention is how underfunded many community colleges are as they strain to educate their current students, much less a crush of newcomers.

While community colleges typically attract the neediest students who arrive with the most educational challenges, these schools receive far less money than four-year public institutions.

In raw numbers, private research universities spend five times as much per student as community colleges, and public research universities spend almost three times as much, according to a new study by the Century Foundation.

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When looking just at money devoted to educating students as opposed to research and other expenses, community colleges receive $7,420 in public funds to educate each student versus $16,303 per student at public research universities, where student bodies are significantly more affluent.

A major conclusion of the Century Foundation study is that trying to educate community college students on the cheap isn't working.

One consequence of inadequate resources is the dismal graduation record of two-year colleges. While 81 percent of first-time community college students say they want to earn at least a bachelor's degree, only 12 percent manage to do so after six years of trying. During the same period, two-thirds of students haven't earned an associate's degree or a certificate.

"The current approach," the report noted, "ends up being highly inefficient because while the costs of community college are relatively low, low completion rates at these schools mean the costs per degree or certificate are high."

The Century Foundation report focuses on ways to address the funding inequality for the most vulnerable college students.

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To tip the playing field ever so slightly, the foundation recommends that the federal government consider taxing the endowments of very wealthy institutions and divert the revenue to community colleges educating low-income students.

The Nexus Research and Policy Center has recommended applying an excise tax of between 0.5 percent and 2 percent on endowments of more than $500 million that institutions could offset by spending more funds on financial aid for needy students.

The nation's wealthy colleges and universities would no doubt vigorously attack any proposal to take from the rich and give to the poor. Senator Charles Grassley (R-Iowa) can attest to that. Before the recession hit in 2008, the senator experienced tremendous blowback when he argued that rich schools need to be spending more of the tax-exempt funds sitting in their endowments.

The Century Foundation also suggested that the federal government or a group of foundations support research to better identify the full level of funding that each category of higher education currently receives. That would include direct expenditures and tax breaks. The paper noted that private schools receive enormous tax subsidies that are largely hidden from the public.

Nexus researchers, for instance, estimated that in 2013 taxpayer subsidies to private Princeton University came to $105,000 per student versus $4,700 for students at public Rutgers University, both in New Jersey.

In making its pitch for equality, the report concluded with this thought:

"We can no longer afford to write off large chunks of our population. Providing adequate levels of funding to educate students of all backgrounds is a critical step in helping community colleges fulfill their original promise of serving as engines for social mobility."